export control regulations overview for research administration personnel

Export Control RegulationsOverview for

Research Administration

Personnel

P:\bfn\bfnbvy\powerpt\ott export.ppt

Why Is Compliance Important?

Possibility of Substantial Fines and Imprisonment for Violators

Civil & Criminal Penalties, for the Individual and the Institution

Loss of Export Privileges Limiting participation of

foreign nationals in University research is not realistic and contrary to policy

Bad Publicity


Export Controls in a Nutshell


Three U.S. Export Licensing Programs

Cuba

U.S. Department of State (Office of Defense Trade Controls)

controls defense articles, defense services, and related technical

data, including most space-related articles.U.S. Department of Commerce

(Bureau of Industry and Security) controls “dual-use” items – goods and technology with both civilian

and military/strategic uses.

U.S. Department of the Treasury oversees U.S. trade embargoes

(Office of Foreign Assets Control) and enforces all three programs

at U.S. borders through U.S. Customs Service.


Law and Regulations

Commerce Department

State Department

Treasury Department

Export Administration

Act

Arms Export Control Act

Trading with the Enemy Act, Int’l

Emergency Economic

Powers Act, & Others

Export Administration

Regulations (“EAR”)

15 C.F.R. Parts 700-799

International Traffic in Arms

Regulations (“ITAR”)

22 C.F.R. Parts 120-130

Iraq Sanctions Regulations,

Terrorism Sanctions

Regulations, & Others

31 C.F.R. Parts 500-599

Commerce Control List

U.S. Munitions List

List of Specially Designated Nationals &

Blocked Persons


What Is an Export?ITAR 120.17, EAR 734.2(b)

An actual shipment or transmission of items subject to the EAR or ITAR out of the United States

Disclosing (including oral or visual disclosure) “technical data” or “technology” (including software source code) to a “foreign person,” whether in the United States (“deemed export”) or abroad

Performing technical assistance, training, or other “defense services” for, or on behalf of, a “foreign person,” (including foreign corporations) whether in the United States (“deemed export”) or abroad

Reexporting from foreign countries U.S.-origin goods or technical data, goods incorporating U.S. components, or goods manufactured from U.S. technology or reexporting U.S.-origin “technical data” or software


EXAMPLES OF EXPORTS

Physical Shipments or Hand Carry

Release of technical data or software in a foreign country

Release of Source Code to a foreign national in the US

Release of Technical Data to a foreign national in the US

Inspections of U.S. Equipment and Facilities by a Foreign National

Demonstrations, Meetings, and Training


U.S. and Foreign PersonsITAR 120.15 & 16, EAR 772.1

“U.S. Person” means: a “Lawful Permanent Resident (8 USC 1101 (a)(20))

– U.S. Citizen or national– Legal immigrant with a “green card”

a “Protected Individual” under the INA (8 USC 1324(b)(3))– designated an asylee or refugee– a temporary resident under amnesty provisions– but does not include Protected Individuals who:

o fail to apply for citizenship within 6 months of becoming eligible

o have not been naturalized within 2 years after applying

any entity incorporated to do business in the United States

“Foreign Person” means everyone else includes foreign businesses not incorporated in the

U.S. EAR does not use the term “Foreign Person,” instead

refers to “foreign national,” exempting Protected Individuals (See EAR 734.2(b)(ii))


U.S. Munitions List (USML)

I - Firearms II - Artillery Projectors III - Ammunition *IV - Launch Vehicles, etc... *V - Explosives, Propellants,

Incendiary Agents and Their Constituents

VI - Vessels of War and Special Naval Equipment

VII - Tanks and Military Vehicles VIII - Aircraft and Associated

Equipment IX - Military Training Equipment X - Protective Personnel

Equipment XI - Military Electronics *XII - Fire Control, Range Finder,

Optical and Guidance and Control Equipment

*XIII - Auxiliary Military Equipment

XIV - Toxicological Agents and Equipment and Radiological Equipment

*XV - Spacecraft Systems and Associated Equipment

XVI - Nuclear Weapons Design and Related Equipment

XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated

XVIII - Reserved XIX - Reserved XX - Submersible Vessels,

Oceanographic and Associated Equipment

XXI - Miscellaneous Articles


Commerce Control List (CCL)

Category 0 - Nuclear Materials, Facilities and Equipment and Misc.

Category 1 - Materials, Chemicals, Microorganisms and Toxins

Category 2 - Materials Processing

Category 3 - Electronics Category 4 - Computers

Category 5 - Telecommunications and Information Security

Category 6 - Lasers and Sensors

Category 7 - Navigation and Avionics

Category 8 - Marine Category 9 - Propulsion

Systems, Space Vehicles and Related Equipment


Examples of Items Covered by Category 3 - Electronics

Category ExampleSystems, Equip, Mass Spectrometers & Oscilloscopes

& Components

Test, Inspection, Equipment for the manufacturing of production &Prod Equip semiconductor devices or material

Materials Hetero-epitaxial materials consisting of a “substrate” having stacked epitaxially grown multiple layers of: silicon, germanium,or compounds of gallium or indium

Software Computer-aided design software designed for semiconductor devices or integrated circuits having any of the following: design rules or circuit verification rules, simulation of the physically laid out circuits, or lithographic processing simulators for design

Technology Technical data for the development of production of any of the above items


Technical Data & TechnologyITAR 120.10, EAR 772.1

ITAR 120.10 defines “technical data” as

Information . . . required for the design, development production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles.

Invention covered by an invention secrecy order

Software directly related to defense articles


EAR 772.1 defines “technology” as Specific information necessary for the

“development,” “production,” or “use” of a product. The information takes the form of “technical data” or “technical assistance.”

Technical assistance may take forms such as instruction, skills training, working knowledge, and consulting services and may involve transfer of “technical data.”

“Technical data” may take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on other media or devices such as disk, tape, read-only memories.




What is not “technical data” or “technology” Publicly available technical data and software Published for sale, in libraries open to the

public, or through patents available at any patent office

General scientific, mathematical, or engineering principles commonly taught in colleges and universities

Through unlimited distribution at a conference, meeting, seminar, trade show, or exhibition (provided no previous government or industry restrictions on distribution applied)

Arise during or result from fundamental research, where no restrictions on publication or access accepted

Non-technical contract or business documents


National Security Decision DirectiveNSDD-189

In September 1985, the Reagan Administration issued NSDD-189 in which it established the following policies: To the maximum extent possible, the products of

fundamental research should remain unrestricted. Where the national security requires control, the

mechanism for control of information generated during Federally-funded fundamental research in science, technology, and engineering at colleges, universities, and laboratories is classification.

No restriction may be placed upon the conduct or reporting of Federally-funded fundamental research that has not received national security classification, except as provided in applicable U.S. statutes.

President Bush’s National Security Advisor, Condoleezza Rice, reaffirmed NSDD-189 in November 2001.



NSDD-189 defined “fundamental research” as

Basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community.

It is distinguished from research which results in information which is restricted for proprietary reasons or pursuant to specific U.S. Government access and dissemination controls.



NSDD-189’s definition of “fundamental research” is reflected throughout the ITAR and EAR in terms of what research is subject to export controls.

Avoiding restrictions on access and dissemination of research findings in contracts with the U.S. Government and industry is a key strategy for minimizing export control issues in university and research laboratory settings.


Key EAR Exceptions

EAR 734.3(b) – “What is not subject to the EAR?” Publicly available technology and software,

except software controlled for EI (encryption) under ECCN 5D002 that– Are already published or will be published

– EAR 734.7– Arise during, or result from, fundamental

research – EAR 734.8– Are educational – EAR 734.9– Are included in certain patent applications

– EAR 734.10 See Supplement No. 1 to Part 734 for extensive

explanatory questions and answer regarding what is not subject to the EAR in the context of university and research laboratory activities.


Key EAR Exceptions

EAR 734.11 – “What is government research covered by contract controls? If research is funded by the U.S.

Government, and specific national security controls are agreed on to protect information resulting from the research, EAR 734.3(b)(3) will not apply.


Key EAR Exceptions

Examples of “specific national security controls” include: Requirements for prepublication review by the

Government, with right to withhold permission for publication

Restrictions on prepublication dissemination of information to non-U.S. citizens or other categories of persons

Restrictions on participation of non-U.S. citizens or other categories of persons in the research.

BUT: A general reference to one or more export control laws or regulations or a general reminder that the Government retains the right to classify is not a “specific national security control.” (EAR 734.11)


Key ITAR Exemptions

ITAR 125.4(b)(10) – Exempts from licensing requirements disclosures of unclassified technical data in the U.S. by U.S. institutions of higher learning to foreign persons who are their bona fide and full time regular employees. Employee’s permanent abode throughout the

period of employment must be in the U.S. Employee must not be a national of a country

to which exports are prohibited pursuant to ITAR 126.1 (e.g., Belarus, Cuba, Iran, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Somalia, and Sudan—list as of 7/2003)

The institution informs the individual in writing that the technical data may not be transferred to other foreign persons without the prior written approval of the Office of Defense Trade Controls


Take Home Messages


Do’s and Don’ts Do NOT Ship Any Item Outside the U.S. without first

checking the ITAR and EAR Lists to determine if the item is controlled (This includes Outgoing MTA’s, Software Licenses, and any Agreement Deliverables)

Secure License Approval (through UCOP) or verify license exception PRIOR to Shipment for all controlled items

Do NOT Accept Publication or Access Controls in research agreements (regardless of whether federal, state, or private)

Do NOT create special training or access programs limited to select foreign companies or foreign nationals without first securing a government-approved Technical Assistance Agreement


Do’s and Don’ts

Screen all proposed research contracts from government and industry for access and dissemination restrictions that might jeopardize the project’s qualification as “fundamental research.”

Do NOT Accept clauses, such as: DOD Clause 252.204-7000, Disclosure of Information FAR Clause 52.227-17, Rights in Data, Special Works Airforce Clause 5352.227-9000, Export Controlled

Data Restrictions Army Clause 52-04-4401, Foreign Nationals

Performing Under Contract (Feb 2002) Questionnaire for Public Trust Positions (SF89P) or

National Agency Check/Name Check Request DD2345, Militarily Critical Technical Data

Agreement Watch out for flow down language!


Do’s and Don’ts

Review any Confidentiality/Non-Disclosure Agreements to insure that UC is not assuming the burden of restricting dissemination based on citizenship status or securing license

Require Commercial Contractor to Secure Any Required Export License Prior to Transfer of Proprietary Data to UC (See EAR 734.8(b)(4) and EAR Supplement 1, Section D, Question 2)

Can agree that the individual to whom proprietary data transferred will not disclose it to anyone (including other UC personnel)

Can agree that UC will comply with Export Regulations; can not agree that data generated by UC in the course of the research is export controlled


Do’s and Don’ts

Whenever possible, make University created software, databases, and other technical data “publicly available” Publication in periodicals, books, print, electronic, or

other media available to a community of persons interested in the subject matter either free or at a price that does not exceed the cost of reproduction and distribution (See EAR Supplement 1, Questions A(1) - A(6)

If the source code of a software program is publicly available, then the machine readable code compiled from the source code is software that is publicly available and, therefore, not subject to the EAR

The cost of reproduction and distribution may include variable and fixed allocations of overhead and normal profit for the reproduction and distribution functions but may not include recovery for development, design, or acquisition, such that the provider does not receive a fee for the inherent value of the software.


Recommendations

Allow sufficient time for governmental authorities to process your application – some ITAR applications take literally months to process – again, Plan ahead!

Consider screening faculty, students, and vendors against “denied party” lists of State, Commerce, and Treasury

Additional Resources: Auburn University Technology Control Plan at

http://web6.duc.auburn.edu/research/vpr/security/tcp.pdf

Berkeley Law Export Control Manual at http://www.lbl.gov/ehs/security/01export/manual.html

See University of Maryland procedures at http://www.umresearch.umd.edu/ORAA/export_control/


Is the Item “Export Controlled?”

EAR List at: http://www.access.gpo.gov/bis/ear/ear_data.html

ITAR List at: http://www.pmdtc.org/docs/ITAR/22cfr121_Part_121.pdf

For EAR Items: 1)Check the “reason for control”; 2)Check country chart; 3)Determine if license required in the column for the country where item to be shipped

For EAR Item, if no “check” in control column for country, then ship under NLR (no license required); If item being shipped is not on Commodity Control List, then ship EAR99 (exempt)

For ITAR Item, if on list, contact UCOP; license will be required because there is no EAR equivalent “country chart”


Questions?

export control regulations overview for research administration personnel

Documents

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